Prudence and final crisis

The dreaded recession in the US has proven to be a difficult phenomenon to forecast. One year ago most people were predicting that there would a slight recession and that it wouldn't last long.

Monday, September 22, 2008

Some were predicting that by the second or third quarter of this year the US economy would be out of danger. With the passing of time, those who predicted a more serious scenarios seem to be right. The ghost of recession is getting bigger and bigger as the financial crisis is reaching dimensions seldom seen before, except for the "collapse" of the financial system during the Great Depression in the 30's. While the depth and duration of this financial crisis is being determined and how it will affect Guatemala, it would be prudent for the Government to take cautious steps regarding its economic policies.

More on this topic

Hard economic times may just be starting

October 2008

The finantial crisis in USA will especially hurt Mexico and Central America, whose economies are closely tied to the U.S. market.

Don't be fooled by the universal sigh of relief that was heard Friday when the U.S. Congress approved a $700 billion package to rescue the U.S. banking system.

Analysts see adverse effects in the Salvadoran economy

September 2008

Lower economic activity and the rise in interest rates are signs that the economy is being affected by the financial crisis in the US.

Some economic analysts warned yesterday that the effects from the financial crisis in the United States, which has been going on for over a year and which has gotten worse recently, are beginning to show up in the Salvadoran economy.

Direct impact of US crisis in Guatemala ruled out

September 2008

Banking monetary and authorities in the country have ruled out a direct impact on Guatemala's economy.

Banking executives agree that the economic situation in the country is uncertain; nonetheless, they need to keep a close eye on what is happening in the American financial market.

The Lehman effect on Guatemala

September 2008

Experts predict that the American financial crisis will be felt through fewer credit flows, foreign investment, exports and remittances.

The National financial system is not showing signs of infection. Jose Angel Lopez, president of the Banking Association of Guatemala (ABG), indicated that the banks have their investments in the Central Bank, in government bonds, credits and other assets, hence their exposure to the American banks is minimum.

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